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Streamline Training & Documentation
Streamline Training & Documentation
Tuesday, February 23, 2010
Alfred Sloan's Memoir VI: Getting Dealers Up to Speed
The woes of discontinued General Motors dealers have been much in the news lately. It's interesting to go back in time some eight decades to see how Alfred Sloan viewed the issue of developing a strong distribution system based on franchised dealerships. In Chapter 16 of My Years with General Motors, Sloan recalls: Alhough in the 1920s we had made great advances in getting the facts about General Motors' economic position, we did not then have the facts regarding the economic position of our dealers, and so were handicapped in thinking through dealer problems. When a dealer's profit position was failing, we had no way of knowing whether this was due to a new-car problem, a used-car problem, a service problem, a parts problem, or some other problem. Without such facts is was impossible to put any sound distribution policy into effect.
In the Proving Ground address which I mentioned earlier [delivered to the Automobile Editors of American Newspapers on September 28, 1927 in Milford MI], I made the following observations on this subject:
... I want to outline to you what I believe to be a great weakness in the automotive industry today and what General Motors is trying to do to correct that weakness.
I have stated frankly to General Motors dealers, in almost every city in the United States, that I was deeply concerned with the fact that many of them, even those who were carrying on in a reasonably efficient manner, were not making the return on their capital that they should. Right here let me say that so far as General Motors dealers are concerned, from what facts I have — I realize there has been much improvement during the past two or three years, but interested as the management of General Motors must be in every step from the raw material to the ultimate consumer, and recognizing that this chain of circumstances is no stronger than its weakest link, I feel a great deal of uncertainty as to the operating position of our dealer organization as a whole. I hope that this feeling of uncertainty is unwarranted. I am sure that with a responsibility so great, all elements of uncertainty must be eliminated and that our dealers should know the facts about their operating position as clearly and as scientifically as I have outlined to you we feel that we know the facts about General Motors' operating position.
This brings us back to ... two words — proper accounting. Many of our dealers, and the same thing applies to dealers of other organizations, have good accounting systems. Many of them have indifferent ones and I regret to say that too large a percentage of them have practically no accounting system at all. Many of those who have accounting systems, through lack of their being properly developed, are not able to effectively use them. In other words, they are not so developed that they give the dealer the facts about his business; where the leaks are; what he should do to improve his position. As I said before, uncertainty must be eliminated. Uncertainty and efficiency are as far apart as the North Pole is from the South. If I could wave a magic wand over our dealer organization, with the result that every dealer could have a proper accounting system, could know the facts about his business and could intelligently deal with the many details incident to his business in an intelligent manner as a result thereof, I would be willing to pay for that accomplishment an enormous sum and I would be fully justified in doing so. It would be the best investment General Motors ever made.Accordingly, in 1927 we set up an organization called Motors Accounting Company. We developed a standardized accounting system applicable to all dealers and sent a staff into the field to help install it and to establish an audit system.
A central premise of the course is that companies need to define an operating model in order to be able to optimize their IT investments. Ross explains (pdf):
An operating model is the necessary level of business process integration and standardization for delivering goods and services to customers. By identifying integration and standardization requirements an operating model defines critical IT and business process capabilities ... [and thus] guides IT investment and enhances business agility. (emphasis in original)
The graphic below lays out the four types of operating model that are determined by a company's integration and standardization choices.
A company using the Coordination model operates unique business units with a need to know each other's transactions. Its key IT capability is providing access to shared data through standard technology interfaces. MetLife is an example.
A company using the Unification model operates as a single business with global process standards and global data access. Its key IT capability is providing enterprise systems that reinforce standard processes and provide global data access. UPS is an example.
A company using the Diversification model operates independent business units with different customers and expertise. Its key IT capability is providing economies of scale without limiting independence. Johnson & Johnson is an example.
A company using the Replication model operates independent but similar business units. Its key IT capability is providing standard infrastructure and application components for global efficiencies. Marriott is an example.
You can find further details concerning the characteristics of each of these models in a briefing Ross published in 2005 that serves as the assigned reading for the third session of the course.
Impact of Quality of Management Practices on Firm Performance
As a follow-on to my last twoposts, I want to call attention to a piece of experimental research (pdf) conducted by Nicholas Bloom and several colleagues that provides evidence in support of the hypothesis that the quality of management practices significantly influences firm performance.
Bloom et al. summarize their work (which is due to continue through April) as follows:
We run a field experiment on large Indian textile firms to evaluate the causal impact of management on performance. To generate changes in management we provide management consulting to a set of randomly chosen treatment plants, and compare their performance to a set of control plants. We find that improved management practices led to significantly higher efficiency and quality, and lower inventory levels, substantially increasing plants’ productivity and profitability. Firms also transferred these improved management practices from their treated plants to other plants within their group. Since firms adopted and replicated these apparently profitable management practices this raises the question of why these were not adopted previously? Our results suggest that informational barriers are important in explaining this lack of adoption, with modern management practices a type of technology that diffuses slowly between firms. These Indian firms were either unaware of many modern management practices, or did not have the know how to implement them.
The photo below, one of several included in the preliminary draft (pdf) of the authors' paper currently available on the internet, illustrates quite concretely the degree of operational slack crying out for systematic management attention.
Takeaway: This research supports the proposition that it is effective to teach managers specific lean manufacturing practices that help optimize factory operations, inventory control, quality control, human resources, planning, and sales and order management.
I can't say I'm sold on the broad feasibility of "reality mining," a quantitative technique for tracking people's relationships and behavior developed by Alex (Sandy) Pentland, a professor of media, arts, and sciences at MIT. Reality mining uses electronic sensors to collect the data, which is then analyzed to identify patterns that are influencing performance.
The two videos below provide an overview. The first explains how "honest signals" — defined by Pentland as "unconscious human behaviors that give reliable insight into our relationships and attitudes" — are gathered and analyzed electronically. For more detail, you can turn to Prof. Pentland's 2008 book, Honest Signals: How They Shape Our World .
The second video presents clips of Prof. Pentland responding to questions concerning Honest Signals.
Data collection via sensors that record a person's location, body movements, tone of voice, etc., raises obvious privacy concerns. In an article published in 2007 in Booz Allen's strategy+business magazine, author Mark Buchanan lists Pentland's suggestions for dealing with the privacy issue in a business firm, which include:
... that the technology ought to be used on a voluntary basis, with individuals adopting it because they learn the benefits that it brings for both themselves and the company. An organization could store information on individuals’ own personal computers, rather than in a central location. It might also give people the opportunity, at the end of each day, to review the data that’s been recorded about their activities. They could have the option of deleting anything they’d prefer to keep private. The devices might be fitted with an additional button that would erase, say, the last 10 minutes of data, or data collection might be strictly limited to teams, time frames, and workplace settings where there has been explicit agreement in advance to allow the analysis. Although all these possibilities reduce the amount and quality of data that would be gathered, some steps along such lines will be crucial for giving people confidence that their privacy is being protected.
I leave it to you, after watching Prof. Pentland in the videos, to decide whether or not he oversells his concepts. As I indicated at the beginning, I am not convinced that his "sociometric" techniques have the broad application he claims. For instance, any alert business manager knows, without checking data collected by electronic sensors, that employees often need help in matching their styles to the expectations and preferences of those with whom they work, both internally and externally. On the other hand, I find Prof. Pentland's description of an application like the fuel economy game quite credible.
John Shook, an industrial anthropologist who worked with the NUMMI joint venture of Toyota and General Motors from its inception, has written an illuminating article about cultural change at the NUMMI factory in Fremont CA. The article appears in the Winter 2010 issue of the MIT Sloan Management Review.
Shook's model of cultural change is a close cousin of that put forward by Edgar Schein, an emeritus Sloan professor who specializes in organizational development. The Shook and Schein models are diagrammed in the graphic below.
The arrows in the graphic represent old and new thinking concerning the process of cultural change.
The traditional view, represented by the upward arrows, is that you start by getting people to change their thinking about how it's proper to behave, and they then proceed to make the desired behavioral changes. The Schein/Shook view, represented by the downward arrows, is that you start by getting people to change their behavior and, in due course they adjust their thinking about what sort of behavior is appropriate.
In Schein's model, the initial step is to change "cultural artifacts" — "the observable data of an organization, which include what people do and how they behave." This leads to a change in people's values and attitudes and, ultimately, to a change in the "pattern of shared basic assumptions ... that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to [solving] problems."1
In Shook's very similar model, managers initiate the process of cultural change by defining the actions and behaviors they desire, providing training, and designing the work processes that are necessary to reinforce those behaviors. This leads to a change in people's values and attitudes and, ultimately, to a change in organizational culture.
Shook describes how NUMMI's adoption of Toyota's system of requiring workers to immediately address any problem, even if that means stopping the production line until the problem is fixed, quickly produced a new culture of employee concern for quality. Previously, the factory had been plagued by worker-management friction and high absenteeism, and quality had been notoriously poor.
In Shook's view,
What changed the culture at NUMMI wasn’t an abstract notion of “employee involvement” or “a learning organization” or even “culture” at all. What changed the culture was giving employees the means by which they could successfully do their jobs. It was communicating clearly to employees what their jobs were and providing the training and tools to enable them to perform those jobs successfully.
The key take-away Shook offers at the conclusion of his article is that the "tools of the Toyota Production System are all designed around making it easy to learn from mistakes. Making it easy to learn from mistakes means changing our attitude toward them," i.e. skipping the finger-pointing and instead nurturing a culture of alert problem solving by empowered amployees.
__________ 1 Edgar Schein, "Organizational Culture and Leadership" (1993) in Classics of Organization Theory, Jay Shafritz and J. Steven Ott (eds.) (Harcourt College Publishers, 2001), pp. 373-374.
Productivity is in the news these days as people take note that it is rising impressively in the US even as unemployment remains high. What lies behind the ability of companies to maintain needed output levels with fewer employees?
One known source of productivity gains is investment in information technology. But some companies do markedly better in realizing productivity gains from IT than others. Why?
Erik Brynjolfsson, a professor at MIT's Sloan School of Management and Director of the MIT Center for Digital Business, and Adam Saunders, a lecturer at UPenn's Wharton School, have been investigating this question. The answer they offer in a recently published book is that
companies with the highest level of returns to their technology investment are doing more than just buying technology; they are inventing new forms of organizational capital to become digital organizations. These innovations include a cluster of organizational and business-process changes, including broader sharing of information, decentralized decision-making, linking pay and promotions to performance, pruning of non-core products and processes, and greater investments in training and education.
You can access the introduction and first chapter of Brynjolfsson and Saunders' book here.
[Earlier reference to the points Brynjolfsson and Saunders make in their book can be found in a post from July of last year. Brynjolfsson's views (along with those of co-auther Andrew McAfee) concerning measurement of economic activity that improves on the standard GDP measure are discussed in a post from last month.]
A couple of days ago, Joe Hodas, senior VP – Brand Communications at a Colorado marketing agency, published a column in Advertising Age that offers a checklist of ten do's and one don't that will help you "advance your career witout selling your soul."
In edited form, Hodas's ten principles are:
Nothing replaces hard work.Effective hard work, that is. You do need to produce valuable results.
We all have a personal toolkit — know yours and how to use it. Identify and apply your strengths. Keep strengthening your strengths.
It's about teamwork, but know who is and isn't on your team. Be an upstanding, savvy participant in the office politics you will inevitably be dealing with.
Don't throw any fits. Outbursts are unprofessional.
Decide how much you can take before you bail. "A career is like a relationship, so make sure you're putting as much effort into trying to fix the problems as you put into feeling bad about them."
Earn your raises and promotions. Hodas is "a firm believer that raises are for the work you've done, and promotions are for the work you can do."
Individuality is to be respected — as long as you're still part of the team. "Don't be afraid to stand out, but do make sure you don't alienate your teammates in the process."
Always try to add something smart to the discussion. And be ready with a rationale for what you are saying. I would argue that "because" (or its equivalent in your own language) is one of the most beautiful words you can use.
Sometimes you have to raise the volume in order to be heard. If you feel strongly about something — and are all set with your "because" statement — speak right up.
Have a perspective on the past, present and future. This is the most agency-oriented of Hodas's points, but it still can readily be applied in other industries: "It's not enough to do well today. Your boss wants and needs to see that you have a broader outlook on where you / the client / the work / etc. has been, is now and will be going."
Always be that ray of light in your boss's/ co-worker's day. This is among my favorite precepts. Remember: What you say and do in a particular situation is a statement of what sort of person you are. So be sure what you say and do reflects the you you want to be.
If Hodas's advice seems commonsensical, there's a reason for that. Principles for handling oneself well generally are a matter of common sense. The challenges are to know what to focus on, and to recruit the strength to be consistent in actually following the principles you swear by.
From Book I, Chapter II, of the original 1776 edition of Adam Smith's Wealth of Nations. . . ... thus the certainty of being able to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men's labour as he may have occasion for, encourages every man to apply himself to a particular occupation, and to cultivate and bring to perfection whatever talent or genius he may possess for that particular species of business.
The difference of natural talents in different men is, in reality, much less than we are aware of; and the very different genius which appears to distinguish men of different professions, when grown up to maturity, is not upon many occasions so much the cause as the effect of the division of labour. The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature as from habit, custom, and education. When they came into the world, and for the first six or eight years of their existence, they were perhaps very much alike, and neither their parents nor playfellows could perceive any remarkable difference. About that age, or soon after, they come to be employed in very different occupations. The difference of talents comes then to be taken notice of, and widens by degrees, till at last the vanity of the philosopher is willing to acknowledge scarce any resemblance. But without the disposition to truck, barter, and exchange, every man must have procured to himself every necessary and conveniency of life which he wanted. All must have had the same duties to perform, and the same work to do, and there could have been no such difference of employment as could alone give occasion to any great difference of talents.
The basic question Williamson has examined in his research is what determines when the market is the best mechanism for handling business transactions, and when the firm is best.
Answering this question required Williamson to investigate what sorts of transaction costs make use of the firm structure — a hierarchical structure — more economical, relative to depending on market dealings.
As the Royal Swedish Academy of Sciences explains in its summary for the public,
... Williamson expects hierarchical organizations to emerge when transactions are complex or non-standard [making it hard to write complete and enforceable contracts], and when parties are mutually dependent. Perhaps the most typical case of mutual dependence is that parties have assets, either physical assets or knowledge, which are only valuable inside a relationship.
For example:
The value of a coal mine in case the owner cannot agree on the terms of trade with a nearby power plant depends on the distance to the second-nearest buyer of coal, which is usually another power plant. Likewise, the value of a coal-burning power plant in case it cannot trade with the nearby coal mine depends on the distance to the second nearest mine. The larger the distances, the greater is the mutual dependence, and — according to the theory — the more likely the mine and the plant are vertically integrated. This is precisely what is observed. When there are other nearby mines and power plants, firms are typically incorporated separately and trade under relatively short and simple contracts. As the distance to alternative trading partners increases, contract duration and complexity also increase. According to one of the studies, a coal-burning power plant that is located next to a coal mine is about six times more likely to be fully integrated than is any other coal-burning power plant.
For further coverage of Williamson's work, touching upon the evidence for the validity of his theory, its policy implications, and how it has been expanded and deepened by other researchers, you can read the Academy of Sciences' Scientific Background (pdf – about six pages each on Williamson and Ostrom).
Elinor Ostrom's Research on Management of Common Resources
You can get an overview of Elinor Ostrom's work on "self-organizing and self-governing forms of collective action" in an interview (pdf) she gave Paul Aligica in 2003.
Elinor Ostrom talking in Stockholm about getting "Beyond the Tragedy of the Commons" (2009) (Stockholm Resilience Centre)
In the interview, Ostrom explains the gist of her thinking:
Academics, aid donors, international nongovernmental organizations, central governments, and local citizens need to learn and relearn that no government can develop the full array of knowledge, institutions and social capital needed to govern development efficiently and sustainably. The sheer variety of cultural and biological adaptations to diverse ecological conditions is so great that I am willing to make the following assertion: Any single, comprehensive set of formal laws intended to govern a large expanse of territory containing diverse ecological niches is bound to fail in many of the areas where it is applied.
Improving the abilities of those directly engaged in the particulars of their local conditions to organize themselves in deeply nested enterprises is potentially a more successful strategy for solving resource problems than attempting to implement idealized, theoretically optimal institutional arrangements. There is plenty that national government officials can do to help a self-governing society. They can provide efficient, fair, and honest court systems, effective property right systems and large-scale infrastructure projects — such as national highways — that cannot be provided locally.
Ostrom emphasizes the importance of viewing self-organized groups as complex adaptive systems and of recognizing the value of polycentric governance.
Complex adaptive systems are composed of a large number of active elements whose rich patterns of interaction produce emergent properties that are not easy to predict by analyzing the separate parts of a system. One can see them as consisting of rules and interacting agents that adapt by changing the rules dynamically on the basis of experience. ... [S]ocial scientists have yet to develop many of the concepts needed to understand the adaptability of systems. ...
Many of the capabilities of complex adaptive systems are retained in a polycentric public enterprise system. By "polycentric" I mean a system where citizens are able to organize not just one but multiple governing authorities, as well as private arrangements, at different scales. Each unit may exercise considerable independence to make and enforce rules within a circumscribed scope of authority for a specified geographical area. ... Self-organized resource governance systems, in such a system, may be special districts, private associations, or parts of a local government.
...
Serious empirical research has now shown that polycentric systems tend to generate higher levels of output at similar or lower costs than monocentric systems governing similar ecological, urban, and social systems.
Another, more recent overview of Ostrom's work is provided in the video below, which records the 8½-minute talk she gave earlier this year at the Stockholm Resilience Centre.
(Background information on Ostrom's Stockholm talk is here.)
The suspense ended last night when the 2009 Ig Nobel prizes were awarded at Harvard's Sanders Theater.
For us here at Streamline Training and Documentation, the Veterinary Medicine prize was of particular interest because of its likely applicability beyond the realm of bovines, who were the subjects of the honored research.
Catherine Douglas and Peter Rowlinson of the School of Agriculture, Food and Rural Development at Newcastle University in the UK were cited for their study demonstrating that "cows who have names give more milk than cows that are nameless." You can read the details in the Douglas/Rowlinson paper, "Exploring Stock Managers' Perceptions of the Human-Animal Relationship on Dairy Farms and an Association with Milk Production," which appeared in the March 2009 issue of Anthrozoös.1
The finding that addressing cows by name was correlated with enhanced milk production certainly fits my own limited experience with dairy farming, which goes back to visiting a relative's farm in Wisconsin when I was twelve years old. All the cows had names, and they collectively produced a very satisfactory daily poundage of milk.
In fairness, I hasten to add that the farmer's sons, who handled the milking, also played music on the radio for the cows and constantly petted them and encouraged them to "unlax." Also, the cows were carefully fed and otherwise attended to, so, since I have no actual data to examine, it's not entirely clear how much independent weight addressing the cows by name carried in determining milk output.
I'll simply note that there is surely a lesson in the Douglas/Rowlinson study for those interested in promoting human productivity.
__________ 1 "Exploring Stock Managers' Perceptions of the Human-Animal Relationship on Dairy Farms and an Association with Milk Production," Catherine Bertenshaw [Douglas] and Peter Rowlinson, Anthrozoös, vol. 22, no. 1 (March 2009), pp. 59-69.
People differ in their views concerning the circumstances in which businesses benefit from promoting competition among employees. I don't want to tackle such a broad topic here, and so will restrict myself to noting what some recent research suggests would be most effective specifically in a company's Sales department.
Earlier this year, Stephen Garcia, a psychology professor at the University of Michigan, and Avishalom Tor, a law professor at the University of Haifa, published a paper examining the relationship between the number of competitors a person is facing and that person's motivation to compete.1 A good summary of the paper appeared in the July 11 edition of The Economist.
Garcia and Tor report two findings of significance to businesses in which individual sales representatives are, to a greater or lesser degree, in competition with each other:
After a certain number, which is quite low,2 the more competitors a person is facing, the lower that person's motivation to compete.
The negative correlation between number of competitors and competitive motivation — which Garcia and Tor have dubbed the "N-Effect" — comes into play only when the people involved are in the habit of comparing their performance to that of others.3 I.e., it is in this context of social comparison that the number of competitors makes a difference; a small number of competitors is more conducive to comparison of one's own performance to that of others than is a large number of competitors.4
I think it's clear why I see particular relevance of these results to management of sales organizations. As Garcia and Tor put it, "In the workplace ... productivity on individual tasks (e.g., sales in a commission-based system) might be lower when the tasks are performed among many similar workers in a large warehouse than when they are performed among only a few workers in smaller branch offices."
2 Garcia and Tor note that the limits of the N-Effect remain to be studied and are likely to vary according to the exact type of competition in question. ("N poker-table competitors may well be perceived differently from N marathon runners.")
In the surprisingly fluffy Summer 2009 issue of the MIT Sloan Management Review — they seem to have been sucked into the camp that swears by abridgement and abbreviation (the curse of Twitter) — an article I found appealingly substantive addresses the question of how to manage virtual teams.
As summarized in their first exhibit, the benefits (somewhat edited) are:
Heterogeneous knowledge resources
Utilization of cost advantages
Access to diverse skills and experience
Knowledge about diverse markets
Ability to have people working more or less around the clock because they are in different time zones
The liabilities (somewhat edited) are:
Language differences
Cultural differences
Difficulties in establishing common ground
Fewer face-to-face interactions
Greater difficulty in achieving good teamwork
The key finding Siebdrat, Hoegl, and Ernst (SHE) report, from their research into the workings of twenty-eight software development teams in Brazil, China, Denmark, France, Germany, India, and the US, is that the balance of benefits vs. liabilities tends to favor dispersed teams under certain important conditions.
These conditions are that a team's task-related ("hard") and socio-emotional ("soft") processes be well-managed. SHE report:
"[T]hose processes that are directly task-related are the most critical for the performance of dispersed teams. Specifically, virtual teams that had processes that increased the levels of mutual support, member effort, work coordination, balance of member contributions and task-related communications consistently outperformed other teams with lower levels. ... Moreover, dispersed teams that had high levels of task-related processes were notably able to outperform colocated teams with similar levels of those same processes despite the physical separation of their members."
On the other hand, "dispersion carries significant risks: Those teams with poor task-related processes suffered heavily with increased dispersion."
With respect to socio-emotional processes, "organizations must ... ensure that team members commit to the overall group goals, identify with the team and actively support a team spirit." The quality of these processes, in and of themselves, does not differentiate performance of dispersed and colocated teams. However, SHE suggest that building robust socio-emotional processes supports achieving high quality of task-related processes. For example, with good team cohesion, it is probably the case that knowledge is transferred more completely, and conflicts within a team are more readily resolved.
SHE describe five dos and don'ts of managing dispersed teams:
Don't underestimate the significance of small distances. E.g., team members located on different floors of the same building actually tend to be less effective and efficient than teams whose members are on the same floor and than teams more widely dispersed. Only teams with members on different continents perform worse on average.
Emphasize teamwork skills. This means recruiting people who are inclined to play well with others, and providing training to help team members strengthen their teamwork skills.
Promote self-leadership across the team. This is necessary because of the difficulty a designated leader is likely to have in intervening effectively when members of a dispersed team are experiencing conflict or other difficulty. "For a virtual team to succeed, members generally need to be aware of the difficulties of dispersed collaboration and find effective ways to overcome those obstacles on their own." Training can help.
Provide for face-to-face meetings. For instance, a project kickoff meeting in which team members are all assembled in one place can make a real difference in how quickly they begin to function effectively.
Foster a global culture, a mindset "in which people see themselves as part of an international network. ... [M]anagers and team members need to recognize and frame their company as such, communicating the international nature of the organization's operations and markets."
SHE cite practices of companies like Nestlé, General Electric, IBM and SAP, such as sending staff on assignments in foreign countries. SHE also suggest providing inter-cultural training. The intended outcome of such measures is "development of diversity-friendly attitudes and the ability to work in different contexts, which in turn help employees cope with the challenges of distance when working on virtual teams."
I'll close by noting that this research, while quite interesting and suggestive, needs replication in order for an organization to draw on its findings and recommendations with full confidence.
__________ 1 WHU stands for "Wissenschaftliche Hochschule für Unternehmensführung” — Scholarly/Scientific University for Business Management.
The June 2009 issue of the American Economic Review has a notable article by Gary Charness (University of California - Santa Barbara) and Marie-Claire Villeval (University of Lyon, France) that offers evidence that older workers, on average, are no worse than younger workers in terms of cooperativeness, competitiveness, and acceptance of risk. In fact, Charness's and Villeval's evidence suggests that older workers tend to perform better than younger workers when team cooperation is needed.
Charness and Villeval summarize their findings as follows:
Our results show first that seniors [defined as workers over 50] are more cooperative than juniors [defined as workers under 30], in the sense of making more contributions to team production. Second, we see no evidence at all that seniors are more risk averse in financial decisions. Third, seniors react to incentives and the competitiveness of the environment about as strongly as juniors. These three results are found in both the field and laboratory environments. Finally, we observe beneficial effects in the field from having working groups in which there is a mix of juniors and seniors, since working seniors increase their contribution when they know they are interacting with juniors; this suggests that there are indeed benefits in maintaining a work force with diversity in age. In addition, workers at the two firms in our study reveal a preference for being in age-heterogeneous groups. Overall, the implication is that it may not be wise to exclude seniors from the labor force; instead, defining additional short-term incentives near the end of a worker's career to retain and to motivate older workers may provide great benefits to society.
Of course, this research comes with caveats concerning its generalizability (e.g., only workers at two French companies were involved in the field portion of the research). Nevertheless, the statistical significance Charness and Villeval found suggests organization managers would be well-advised to give open-minded consideration to the potential older workers have to make substantial contributions to meeting organizational goals.
Continuing my periodic citation of work by Jeffrey Pfeffer (most recently here), one of my favorite business academics, let me recommend reading the two-page piece he has in the July-August issue of the Harvard Business Review.
"Shareholders First? Not So Fast ..." deals with today's renewed appreciation of the value of considering all stakeholders in business planning and decision-making. Pfeffer argues:
In the 1950s and 1960s, the stakeholder was king. CEOs saw their role as one of balancing the interests of the various groups that touched their companies — customers, employees, suppliers, shareholders, and the community at large. This reflected the executives' sophisticated understanding not only of their role as stewards of the valuable resources entrusted to them but also of their own enlightened self-interest: Each of these groups was essential for organizational success. What was true then is even more so today, in an age of knowledge work, outsourcing, global supply chains, and activist interest groups.
Pfeffer goes on to say that
opinions on deregulation, finance, time horizons, and the wisdom of corporate leaders are all shifting, and the logic for putting the creation of shareholder wealth ahead of the creation of stakeholder-value is rightfully under fire.
To build profitability and productivity, enlightened managers are
implementing high-commitment work practices. These include investing in training, decentralizing decision making, and having pay be contingent on organizational, not just individual, performance. Other sources [of research] show the benefits companies reap from customer loyalty and high levels of customer satisfaction.
Pfeffer points to the increased prominence of balanced scorecards and other assessment tools as evidence that companies using such tools recognize the suboptimality of focusing exclusively on financial metrics.
Of particular interest to people in the training field, are Pfeffer's repeated references the the importance of employee training in implementing strategies that embody a balancing of stakeholders' interests.
As a follow-on to yesterday's post, I'd like to mention the Miradi software that the Conservation Measures Partnership (CMP) and Benetech have been jointly developing since 2007. ("Miradi" is a Swahili word that means "project" or "goal.")
Miradi is designed to provide project teams with the essential features that they need to design, manage, monitor, and learn from their conservation projects, in other words, to practice good adaptive management. Currently, most conservation practitioners go through the adaptive management process either using pen and paper, or by cobbling together functions from a wide range of programs including flowcharting, mapping, project planning, spreadsheet, accounting, and other software packages. Miradi takes the right functions from each of these different kinds of programs and bundles them together in one easy-to-use integrated package.
To get a project set up in the software, the user works through a step-by-step process that matches the flow of the Open Standards for the Practice of Conservation developed by the CMP. Those steps are:
Once the conservation project is set up in Miradi, the project can be managed and tracked using the various data views the software provides.
The Diagram View shows the conceptual model underlying the project:
In a complete conceptual diagram, the overall project scope is linked to specific conservation targets that are each in turn linked to direct threats and the contributing factors that lead to these threats. The diagram also displays the strategies that the project team is taking to counter these threats, showing the key assumptions that the project team is making about how their actions will lead to their desired outcomes. The diagram also allows users to focus on the specific results chain that they predict will happen as a result of their interventions and to determine what indicators they need to measure to test these assumptions over time. [emphasis added]
Other views include the Threat Rating View, Viability Analysis (showing the status of each conservation target, e.g., "coral reefs"), Strategic Planning View, Monitoring View, Work Plan View, and Budget View.
The wikiHow site is a trove of how-to articles on a wide range of subjects:
Arts & Entertainment
Cars & Other Vehicles
Computers & Electronics
Education & Communications
Family Life
Finance & Business
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I find wikiHow useful for browsing for ideas on how to handle various situations, such as preparing for a behavioral interview (one of the items cited below), and for advice that reflects "on the ground" experience.
The articles vary in quality, as you would expect, but they are also easy to scan, so you can quickly decide what you want to pay attention to, and what you want to ignore.
I've listed below some examples of articles I found useful, taken from the Education & Communication, Finance & Business, and Work World categories.
Donald Sull Makes the Case for Management by Commitment
Donald Sull, who teaches management at the London Business School, has long been a proponent of what he calls management by commitment.
As Sull explains in a brief interview posted at BNET.com on March 4, management by commitment involves looking "at an organization as a network of overlapping, continually evolving promises that people make to each other to get things done."1
Sull contrasts management by commitment to two alternatives:
Use of hierarchical power
"This tends to create silos: the hierarchy is very up and down and doesn't work well for work that requires cooperation across different units or functions. It's pretty slow as well; it takes a long time for information to get up the structure and for orders to find their way down."
Management by standardized processes
"This is hugely helpful — it allows you to squeeze out excess resources and continuously improve on what you do. But here we also have limitations, probably the biggest one being that standardization gets in the way of innovation."
For situations that do not lend themselves to standardization, Sull argues that management by commitment allows needed flexibility. Management by commitment also has a natural place in situations in which you need cooperation from someone over whom you have no authority.
Based on research he and his colleague Charles Spinosa have done, Sull cites five characteristics of effective management by commitment:
The commitments are public and they are tracked publicly.
The commitments are active, as opposed to being casual or pro forma.
The commitments are voluntary. The person from whom a commitment is sought can make a counteroffer, or even say no if what's being requested is something the individual really isn't able to take on.
The commitments are explicit, i.e., it is clear which individuals are committing to what objectives and tasks.
The commitments are motivating. People need to care about what they are being asked to do, so that they are willing to carry on when inevitable obstacles crop up. This requires clarifying the importance of, and the rationale for, the actions people are signing up for.
Note: In a longer interview published in 2007 that is well worth reading, Sull explains in more detail how management by commitment helps with strategy execution.
__________ 1 A brief follow-up BNET.com interview with Sull, citing specific examples of use of management by commitment, is here.
Strictly speaking, this is a rhetorical query because, at this stage of the game, a wealth of reports has accumulated of companies that have realized valuable results from adding tools like blogs and wikis to their intranets. The real questions Conry-Murray addresses are "Under what circumstances does enterprise social networking pay off?" and "How can you gauge the size of the payoff?"
The whole article, including its sidebars, is worth reading. As an overview, here are the five best practices Conry-Murray recommends for making the most of social networking:
Start with a low-cost pilot to see what tools deliver useful results.
Set modest expectations. "Don't promise executives that enterprise social networking will unleash, ignite, or synergize anything." Instead: "Describe one or two general business improvements you think are achievable. Set reasonable goals for user adoption, and salt your initial deployment with a few teams that are eager for these kinds of tools. And keep an eye out for ways to measure business value. You may not be expected to produce hard numbers from a pilot, but corporate management will want to know the payback down the line."
Let employees use the tools with lightly controlled freedom. If you impose any but the most obvious restrictions (e.g., "No flaming."), you will inhibit participation and constrain dialogue.
Resist exclusivity. When a business unit or team says they want their tools to be accessible only to themselves, press the argument that the full benefit of enterprise social networking comes from openness to broad participation.
Include robust search capabilities. And: "Be sure the search engine allows for user-generated feedback such as tags and content-rating systems, because the point of social networking in business is to let people provide input into the relevancy of content and people."
As a final note, if you find the powers-that-be are leery of the term "social networking," shift to something more business-sounding, like "collaboration tools," until the "social networking" label becomes familiar to the people who have to authorize introduction and roll-out of the tools you believe will contribute to your organization's productivity and growth.
Yesterday's post touted a model for rural economic development that includes peer learning as one of its basic principles.1
A prime example of what this principle looks like in action can be found at the training facility that Practical Action, a non-governmental organization headquartered in the UK, set up in the town of Sicuani in the Peruvian Andes about 90 miles south of Cusco.
A Kamayoq (agricultural extension agent) assisting with guinea pig husbandry (Practical Action)
The basic concept is to train farmers to deliver agricultural extension services to fellow farmers back in their home villages. These peer extension agents are called "Kamayoqs," the Quechua (Incan) name of people in olden times who were skilled in reading the weather and using their forecasting and other agricultural expertise to advise farmers on such things as when to plant their crops.
In line with another of the principles of the "new development paradigm," the interchanges between Kamayoqs and their farming peers are intended to be two-way, i.e., there is a concerted effort to identify best practices in horticulture and animal husbandry, whether from existing standout performers or from experimenting to see what works best. Learning by doing is central to this Kamayoq-facilitated approach to raising poor farmers' standard of living.
The Kamayoqs live in Andean communities above 3500 meters (11,500 feet), communities barely served by the extension staff of Peru's Ministry of Agriculture. The initial Kamayoq training at the Sicuani school occupies one day a week over an eight-month period. The topics covered include irrigation, Andean crops, horticulture, livestock, forestry, and agro-industry and marketing. Continuing education is also provided.
As explained in a 2006 article (pdf) about the Kamayoq program,
Throughout their training, the Kamayoq establish contact with technical experts from the private and public sectors and with other farmers, a useful network which they can tap into when they need information and technical advice once they finish their training. This "social capital" is recognised by many as one of the greatest benefits of the whole course.
The success of the Kamayoq program is seen in the willingness of farmers to pay for the Kamayoqs' services; the addition of marketable crops (e.g., carrots and onions) to traditional subsistence crops (maize, potatoes, and beans); higher farmer income, some of which goes for additional education for children; improved disease prevention and treatment for farm animals; and more sustainable use of natural resources.
An important qualitative impact of the Kamayoq program is increased self-confidence among farmers, an attitude adjustment that motivates innovation. Willingness to innovate is essential for continuing to raise living standards in the face of the changes that are occurring in the farmers' physical and socioeconomic environment.
__________ 1 Practical Action's methodology draws on the work of Paulo Freire, a Brazilian educator who devoted himself to developing pedagogy for the underclass. You can read more about Freire's work by visiting the website of the Paulo Freire Institute at the University of California, Los Angeles.
